Airlines

June 16, 1999

UAL Corp.'s United Airlines, the world's largest airline, said it plans to introduce the first non-stop flight between Los Angeles and Melbourne, cutting at least three hours of travel time from the current 16-to 18-hour trip.

The new daily service, scheduled to begin Dec. 4, will eliminate the need for a stopover in Sydney or Auckland. It will replace United's daily one-stop flight between Los Angeles and Melbourne, Australia's second-most populous city.

HEALTH CARE

Shares of Boca Raton-based Rexall Sundown, a maker of vitamins and nutritional supplements, fell as much as 19 percent after it warned fiscal fourth-quarter sales could decline because of falling sales of its new Cellasene cellulite-fighting product. The shares fell to a 52-week-low of $10.94 before rebounding to close at $11.94, down $1.50.

Rexall expects to sell up to 77 percent less Cellasene this quarter because it shipped a "significant amount" of the product when it introduced it in the third quarter ended May 31 so retailers could keep it on the shelves, the company said.

On Monday, it reported net sales of $171.2 million in the third quarter ending May 31, up $20 million from the comparable quarter a year before, but net income of $18.5 million declined by $900,000.

Third-quarter diluted earnings per share were 28 cents, up 2 cents from the comparable quarter last year, thanks to a buyback of 1.3 million shares for $24 million, Rexall Sundown President Damon DeSantis said.

DeSantis said higher revenues in the third quarter were offset by $18 million in advertising, up from $4 million the year before. Cellasene was promoted heavily, and celebrities Alex Trebek and Denise Austin appeared in numerous TV commercials for other products.

PEOPLE

Miami-based Perry Ellis International announced that it has appointed Kim Locatell, to the new position of vice president of merchandising for menswear, reporting directly to Allan Zwerner, president of licensing. She will be responsible for coordinating the design direction of all Perry Ellis menswear licensees worldwide.

Locatell most recently was responsible for designing and merchandising the Kenneth Cole Men's Sportswear Collection. She previously held various posts at May Co. and Federated.

TELECOM

The cable industry's new high-speed Internet offerings could be delayed or even wrecked if thousands of local governments each impose a different set of regulations, the head of the Federal Communications Commission said on Tuesday.

FCC chairman William Kennard, echoing a similar warning issued by AT&T chairman Michael Armstrong on Monday, said the regulation of cable Internet service by thousands of localities made possible by a federal court ruling two weeks ago in Oregon would create "chaos."

"The information superhighway will not work if there are 30,000 different technical standards or 30,000 different regulatory structures for broadband," Kennard said in a speech to the National Cable Television Association. "We have to have a national policy."

UTILITIES

Energy East Corp., owner of a New York utility with more than 1 million customers, said it will buy CMP Group, owner of Maine's largest electric utility, for $1.2 billion in cash and assumed debt. Ithaca, N.Y.-based Energy East, parent of New York State Electric & Gas, will pay $29.50 a share, a 47 percent premium over CMP's price Monday. CMP shares were up $5.69 to $25.75 on Tuesday. Energy East rose 6 cents to $26.31.

Energy East will spend $957 million in cash and assume $271 million in debt and preferred stock. Energy East will gain 530,000 customers served by CMP's utility, Central Maine Power Co.

Northeast Utilities, New England's largest power company, agreed to buy Yankee Energy System for $679 million in cash, stock and assumed debt to expand into natural-gas sales as its electricity markets open to competition. The offer values Yankee Energy at $45 a share, a 38 percent premium to Monday's close. Yankee Energy closed up $7.44, at $39.94, on Tuesday. Northeast was down 6 cents to $17.25.

Yankee Energy shareholders will get 55 percent in cash and 45 percent in stock. Northeast Utilities will take on $201 million in debt. With New England states deregulating electricity markets, Northeast Utilities will have to fight to keep its 2.3 million customers in Connecticut, New Hampshire and Massachusetts.